Dr Mahathir, Hsien Loong meeting will chart future direction

KL has continuously stressed that the raw water price sold to the republic is grossly low


Prime Minister Tun Dr Mahathir Mohamad and his counterpart Lee Hsien Loong’s meeting today for their annual retreat will be closely watched by both nations after what has been a frosty 10-month relationship between the two trading partners.

Kuala Lumpur (KL) and Singapore have been locked in decades old issues especially on the raw water price, and sea and airspace claims.

But recent issues like the Seletar Airport airspace claim, sea limits unilateral claim and Malaysia’s plan to develop ship-to-ship transfer project facing the republic’s Tuas area have complicated discussions.

KL has continuously stressed that the raw water price sold to the republic is grossly low, while Singapore maintains that its neighbour has forfeited its rights to review the agreement.

Ministers from both nations have also traded criticisms and rhetorics, putting both neighbours on a collision course. But Malaysia and Singapore realise the economic importance of each other.

“The outcome of the retreat could chart the political and trades ties between the two countries at least for the next 12 months,” said a political observer close to the development.

But many remain sceptical that the one-day retreat between the two leaders will resolve all the thorny issues based on past records.

“Some of the issues are not easy to solve. A lot of people from both nations are closely watching the outcome of the meeting,” said the observer.

The 9th Malaysia-Singapore Leaders’ Retreat was scheduled last November, but was postponed as both nations traded barbs over various issues.

Dr Mahathir last week said the annual meeting will touch on bilateral problems concerning the price of water, maritime borders and airspace territories.

“All of the things that are still unresolved, including the water problem, the central provident fund (and) the borderline with our waters.

“What is Singapore waters? What is Malaysia waters? Also the flights over our area, who is going to control it?” he said last week.

“All these things will be discussed in a friendly manner. We are not going to confront them. But I believe that even Singapore understands the need to revise the price of water,” Dr Mahathir said.

Malaysia’s 93-year-old PM has made the price of water supplied to the republic as a personal cause, stressing that the price is grossly unfair and there is a need to review the terms of the 1962 Water Agreement.

Under the agreement, which expires in 2061, Singapore is entitled to draw up to 250 million gallons a day (mgd) of raw water from the Johor River at three sen per 1,000 gallons.

In return, Johor is entitled to buy 5mgd of treated water from Singapore at 50 sen per 1,000 gallons. Singapore has said this price is heavily subsidised and below the cost of treating the water.

Malaysia and Singapore are also embroiled in a dispute over Singapore’s territorial waters off Tuas. Malaysia extended the Johor Baru Port limits last October. Singapore subsequently responded by extending its port limits within its territorial waters.

Both sides, however, have agreed to de-escalate the tensions by suspending their overlapping port claims and reverting to their ports’ former limits.

Singapore and Malaysia are also in talks over airspace. On April 6, both countries said they had reached an agreement on flying procedures at Seletar Airport, paving the way for Flyfirefly Sdn Bhd to resume its services to Singapore after a four-month hiatus.

Transport Minister Anthony Loke and his Singaporean counterpart Khaw Boon Wan said “in the spirit of bilateral cooperation”, Singapore will withdraw the Instrument Landing System procedures for Seletar Airport, and Malaysia will indefinitely suspend its permanent restricted area over Pasir Gudang, Johor.

With the agreement implemented by the civil aviation authorities of both countries on April 5, the two ministers said they looked forward to Firefly commencing flights to Seletar Airport this month.

The meeting is also expected to touch on repatriating money linked to 1Malaysia Development Bhd (1MDB).

“We will have to depend on Singapore’s information. That money was given back after Singapore investigated.

“Our job is to receive the money, of course, but to be sure that this money is coming from 1MDB. We cannot accept money that is not ours,” Dr Mahathir said.

It was reported in September last year that the Singapore State Courts had granted disposal orders in respect of monies that were misappropriated from 1MDB and SRC International Sdn Bhd. The monies recovered were in various currencies, totalling RM45.9 million.